I usually describe it as "taking trust that keeps the society together and burning it to generate dollars".
The success of Uber and Airbnb rides on that, you are correct, but we have seen that people are generally good about working within that trust.
Every single month, millions of people take the risk you are talking about and they're fine.
People hop into cars with complete strangers (or homes of complete strangers) where there is a minimal level of security, and they're fine.
We are witnessing the capacity at which society is willing take risk with one-another, and I think we are going to increasingly see the limits being tested. Direct financial risk is right around the corner and we will see people lending to each-other on a large scale.
In case of AirBnB, it's the issue with subletting we're discussing here, which a) damages neighbourhoods quality of life, and b) antagonizes landlords and people who want to rent. It is to be expected that, as AirBnB grows popular, landlords will be much more suspicious and the contracts they offer will be worse for people seeking a place to live.
In case of Uber, they blatantly break the law and have enough money to get away with it. This destroys the trust other taxi drivers have in their local administration ("Why are you letting them get away with it? Why do we have to follow law?") which, as we've seen over the last year, leads them to desperate, stupid-ass protests and gridlocking cities. That antagonizes taxi drivers and general population, the latter then loses trust in the administration which, for some obviously completely unreasonable reason, tries to ban the great Uber.
Many see the taxi-driver cartels for what they are, and act in the interest of the general populace by removing the restrictions. This restores trust in the administration.
And whether Airbnb actually damages the quality of life in neighborhoods is not proven, and I highly doubt landlords will get more suspicious. Insurance providers for vehicle owners and homeowners aren't making noise, so the risk is only to incumbents' business models.
How I'm conflating the two? Taxi drivers get desperate because they can't compete with someone who's breaking the law, and they don't have the money to ignore the law themselves. The genera population gets annoyed because they see government trying to mess up what seems to be a perfectly good service for them.
> Many see the taxi-driver cartels for what they are, and act in the interest of the general populace by removing the restrictions. This restores trust in the administration.
If by "many" you meant governments here then I agree. Governments that see the cartels and remove the problematic regulations are seen as a good thing. But, at least in Europe, it's often the case that those regulations arose for some reasons and are beneficial to the public. The government is reluctant to touch those.
> And whether Airbnb actually damages the quality of life in neighborhoods is not proven, and I highly doubt landlords will get more suspicious.
It's not proven in general, but it is in particular cases, by the sole virtue of reports and journalist investigations. Nobody is accusing AirBnB of only profiting off damaging things - but we have enough evidence to notice that those destructive deals are a big part of their business.
> Insurance providers for vehicle owners (...) aren't making noise, so the risk is only to incumbents' business models.
Why would they make noise? They just add a "no Uber" clause and get to happily keep their money when a person who didn't notice (or elected to ignore) that particular point gets into a car crash while driving for Uber.
At least you're right about the trust between management and leasees degrading to the point that it has to be specifically called out on contracts. Anyone know what percentage of AirBnB is rentals, and how that would impact their revenue if they're phased out in 10 years?
"Anyone know what percentage of AirBnB is rentals, and how that would impact their revenue if they're phased out in 10 years?" I'd love it if this data were accessible, but, alas, Airbnb has been very secretive about that (if they even have that data; they might be sticking their heads in the sand and playing dumb if/when their clients are busted for breaking the laws).
If you were able to tie HOA or other community org bylaws to property addresses, you'd be able to get the data you're looking for.
I have mulled at a startup idea to report AirBnB listings to HOAs that prohibit short term rentals (property compliance), just haven't gone down that road yet.
Quite frankly, you have zero predictive ability to outperform the market, particularly over an extended timespan or multiple credit cycles.
Furthermore, even if you were to "average out" / index your portfolio of P2P loans, your transaction costs would be way higher than simply going through a financial institution that streamlines that process for you so as to minimize transaction costs.
Aside from legal reasons, this is one reason stocks and other financial instruments aren't sold P2P. Considering transaction costs are probably the biggest controllable variable affecting your portfolio's returns, particularly over time, I just can't see how this makes the cost of borrowing go down for the system as a whole.
How could an individual operate similarly?
There are taxi regulations that they're ignoring, such as access to disabled-friendly options. I suspect most of the drivers don't have the correct insurance either, so if you're in a car crash you might be in for a nasty surprise.
But it does seem less exploitative than what many AirBnB hosts are doing.
"""The Uber app is built to expand access to transportation options for all, including people with disabilities, and we are constantly innovating our platform and operations to meet that demand. Today, we are announcing a new platform innovation: the ability to request a wheelchair accessible vehicle in New York City’s outer boroughs."""
IIRC there are other regulations they're not complying with, but I don't recall what they are off the top of my head.
I agree my comment above doesn't fit Uber in such obvious way as it fits AirBnB, but Uber is actually sociopathic in its DNA, starting from top-level management[0]. A lot of things they did and do were based on abuse of trust and civility.
[0] - Source: scroll down to the bottom of this page, enter "Uber" in the search bar, and browse through relevant submissions from the last two years; we've covered all the antisocial behaviour of Uber and its management here, on HN.
But ok, random issues from the top of my head:
- sabotaging competition, hiring people to do this, facilitating mass cancellation of rides by providing them with burner iPhones and credit cards
- blatantly breaking local taxi regulations
- employee/contractor issues and related tax issues
- Uber management declaring they'll set up a fund to ruin a journalist's life because the latter dared to voice criticism about the company
- God's Eye view and privacy issues
- encouraging drivers without proper insurance
- tricking drivers into (and helping them) getting loans for a new car, and then (after a year or two) adjusting payment rates so that they basically stay locked in Uber
All of them discussed at length on HN, most of them covered on the first page of search results.
By showing that some laws are bad? What's wrong with that? I don't think people should have trust in the rule of law.
No. By showing that through breaking them, having enough resources to keep the government at bay. They provide a good service and throw a lot of freebies initially to convince people they're cool, and then when people learn that their local administration is trying to ban/fine Uber, citizens are upset at the officials. Meanwhile taxi drivers ask themselves, why should they follow the law if Uber doesn't have to, and the whole startup ecosystem is looking at Uber as an example of perfect company and trying to replicate their methods.
I don't know about you, but I don't want to see breaking the law as the modus operandi of startups in the future.
> I don't think people should have trust in the rule of law.
In other words, let's just give up on the whole "civilization" thingie, pack our bags and go back to the caves we came from.
I don't think that's bad. I think deliberately breaking bad laws is a reasonable and effective means to get rid of bad laws.
> Meanwhile taxi drivers ask themselves, why should they follow the law if Uber doesn't have to, and the whole startup ecosystem is looking at Uber as an example of perfect company and trying to replicate their methods.
I think taxi drivers should ask themselves that, even before Uber and its kind existed.
> I don't know about you, but I don't want to see breaking the law as the modus operandi of startups in the future.
I don't have a problem with it if I don't like the laws that are being broken.
> In other words, let's just give up on the whole "civilization" thingie, pack our bags and go back to the caves we came from.
Following all laws regardless of their merits is hardly the defining characteristics of civilization.
"First they came..."
No one of us gets to chose which laws are disregarded. We got lucky Uber breaking the rules has a positive outcome for most of us - we get a better service and we don't have to see the immediate externalities. Most of us also haven't been burned by the problem of AirBnB subletting. But what if the next hot SV startup decides to ignore FDA regulations? Because "they're just red tape that stiffles innovation", right? And the next one ignores biotech safety? Do you want to live in the world when any entrepreneur gets to use VC money to blatantly break any law they like?
The only Schelling point here is to obey all the laws by default, and in case you don't like some, to use various mechanisms built into the government to try and change them. It's slower, it doesn't generate hot headlines in the press, but it works and it's the right to do. It doesn't work to destabilize the very society that enables your business model.
> Following all laws regardless of their merits is hardly the defining characteristics of civilization.
It isn't, but following them as a default is, and punishing actors that break the law is too. Even civil disobedience works with expectation that you do get to suffer consequences of breaking the law. Taxi laws may have some problematic parts, but they are nowhere near the category of "so stupid they should have been repelled yesteryear".
How does that apply? The first group they came for were Socialists, and I already oppose that discrimination. I don't understand how that is at all relevant to my views on breaking bad laws.
> But what if the next hot SV startup decides to ignore FDA regulations?
If they ignore FDA regulations that I think are bad, then I will approve. If they ignore FDA regulations that I think are good, then I will oppose. That's pretty simple.
> Do you want to live in the world when any entrepreneur gets to use VC money to blatantly break any law they like?
No, I want to live in a world where entrepreneurs (and indeed everyone) breaks laws that I think are bad.
> The only Schelling point here is to obey all the laws by default, and in case you don't like some, to use various mechanisms built into the government to try and change them.
I could not disagree more. There are countless laws that we probably both think were incredibly bad which were removed precisely because of organized efforts to break them.
> It's slower, it doesn't generate hot headlines in the press, but it works and it's the right to do.
I think it's pretty clear that breaking the law works better. I don't care about "generating hot headlines in the press," and I don't agree that obeying the laws is "the right thing to do."
> It isn't, but following them as a default is, and punishing actors that break the law is too.
I completely disagree. My default is to act in the way I think is appropriate, with no regard for the law except for the obvious threat of punishment if I break a law.
> How does that apply?
First they broke the laws that you didn't like, so you didn't care. Then they destroyed laws you didn't care about, so you didn't question that too. Then they started to destroy the laws you like, and by that time it was too late to stop it, because momentum was too big.
> No, I want to live in a world where entrepreneurs (and indeed everyone) breaks laws that I think are bad.
But can you be sure to always think the law is bad when it is indeed bad, and not only when you're on the worse end of it? Laws have to balance the need of the many. For instance, an owner of a chemical plant may think it's absolutely stupid and bad law that he can't dump toxic waste into the local river.
> There are countless laws that we probably both think were incredibly bad which were removed precisely because of organized efforts to break them.
Taxi laws are not among them, and here we're not talking about activists taking a moral high ground, but about a company with strong antisocial tendencies in its DNA that tries to do a money grab.
There are ways and procedures for giving feedback about the law, and even if sometimes you have to break it, it doesn't change the fact that for a civilized society, the default should always be to follow the law even if you don't like it.
> I think it's pretty clear that breaking the law works better.
And bullets generally work better than arguments for silencing people you disagree with. And yet for some reason we don't go around shooting each other over disputes.
> My default is to act in the way I think is appropriate, with no regard for the law except for the obvious threat of punishment if I break a law.
I really hope you're a god, for whom every appropriate action is the one that creates most good in the world, because you're expressing a very self-centered view. And we know very well that unrestricted following of self-interest leads to misery of everyone. That's why we have laws and social customs in the first place.
But that doesn't many any sense. That's a big leap between breaking laws I don't like and breaking laws I do like. The analogy to that quote about Nazis just doesn't exist.
> But can you be sure to always think the law is bad when it is indeed bad, and not only when you're on the worse end of it? Laws have to balance the need of the many.
Obviously there are subtle cases and cases where I don't have the necessary information to make a judgement.
> Taxi laws are not among them
Aren't they? Haven't a lot of taxi laws been changed since Uber started breaking them? I know that Uber operates legally in some jurisdictions under new regulations.
> it doesn't change the fact that for a civilized society, the default should always be to follow the law even if you don't like it.
That's certainly not a fact. It's an opinion, and one I absolutely do not share.
> And bullets generally work better than arguments for silencing people you disagree with.
I don't believe that's true except in cases where there is a large power disparity between groups.
> I really hope you're a god, for whom every appropriate action is the one that creates most good in the world, because you're expressing a very self-centered view.
It's not any more self-centered than the notion that democracy is a good way to organize society. After all, in democracies, laws are passed by people who ostensibly represent the population, and thus laws are ostensibly a reflection of what behavior people think is appropriate. Assuming you approve of democracy, you already are promoting the notion that individuals have some credible sense of what behavior is and isn't appropriate.
That's fair, but if there was trust in local government and it was doing its job well then there wouldn't be such overwhelming popular support for Uber to begin with. Many licensed taxi services allowed by local governments provide terrible service, and local governments frequently show no interest in improving quality or lowering barriers to entry for new competition as long as they are collecting large amounts of money from medallion sales. This is people voting with their wallets and telling government they don't like the ramifications of existing regulations.
The thing is, Uber isn't even really innovative. In Europe, we had a (arguably slow-going) process of reforming taxi laws going on for years. There were transportation upstarts that tackled taxi regulations through legal channels and in many places, my own country included, they managed to keep themselves on the market. Whatever tension there was between them and taxi companies got resolved in courts, regulations were updated and everyone was better off. But then Uber came and basically said, "fuck regulations, we have money to burn, what you're going to do?".